GSM players pulling up a rip-off: Anil Ambani

In a scathing attack on GSM players, Reliance Communications Chairman Anil Ambani has shot off a letter to Prime Minister Manmohan Singh questioning how there can be a net increase in GSM subscribers month on month if there is an acute shortage of spectrum.

In his letter dated October 19, Ambani points out that while the top three GSM players "" Bharti, Vodafone-Essar and Idea Cellular "" have acquired an additional 52 million subscribers in the past few years without allocation of any additional spectrum, something they have constantly told the government that they do not have sufficiently.

"If there was no spectrum, how did they add 25% to the current subscriber base," he asks in the letter. GSM operators have been adding four to five million subscribers every month for the past many months even as the spectrum shortage issue has been boiling.

Cellular Operators association of India director general T V Ramachandran, however, declined to comment on the points raised by Ambani.

Ambani has also demanded that Bharti, Vodafone-Essar and Idea Cellular should return an aggregate of 50 MHz-plus of spectrum which they have preemptively taken in excess of their entitlement or make appropriate payments to the government for the scarce resource.

Under the licence agreement, the government is contractually obliged to give up to 6.2 MHz of spectrum to a new operator per circle.

However, all these players have received spectrum much beyond the figure in various circles. Ambani has also voluntarily agreed to return spectrum that Reliance Telecom, which operates GSM services in seven circles, holds in excess of 6.2 MHz (Bihar circle).

Ambani has suggested that this excess spectrum should be re-farmed to new players who are waiting to enter the sector (there are over 29 companies waiting in the wings for a UASL).

In his letter, Ambani suggests spectrum of up to 6.2 Mhz should be given to new players, at first, in the same frequency and on the same terms as the existing players in order to create a level playing field.

Ambani says that the excess spectrum with the GSM players has lead to a saving in capital expenditure of over Rs 20,000 crore for the operators. Apart from loss of revenue to the government, it has also prevented new players from coming in.

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IN EXCESS?
Spectrum in excess of 6.2 mhz

Bharti: 21.4 mhz

Vodafone Essar:20.2 mhz

Idea: 12.6 mhz